Pacific Mobile Estates residents in panic after learning plans
to sell rent-controlled homes
Gilroy – Residents of the biggest mobile home park in Gilroy are brimming with confusion and fear after learning of plans to sell off their rent-controlled homes as condominiums.
Under the proposed conversion of Pacific Mobile Estates, a 178-unit community at 500 West 10th St., residents will have first option to buy the land beneath their mobile units, or they can continue renting indefinitely.
Yet few of the 100 residents crammed into the park’s community room Tuesday night were pleased with the idea. Shielded from spiraling housing costs by state rent-control laws, residents currently enjoy some of the lowest housing prices in the city.
“What are our rights to challenge this?” Jonathan Bass demanded several times of Richard Close, the lawyer representing park owner Robert Jurow.
On the final go-round, a frustrated Close told Bass and the clamoring crowd that “you may not like it,” but state law allows for such conversions. He said opponents of the plan would have to consult with the city or their attorneys.
Bass, a 12-year resident of the park, learned Tuesday that his rent after conversion would climb to market rates over the course of five years, while individuals earning less than $59,000 a year and other low-income families would remain under rent control.
“We could be forced to pay high rents or make a land purchase, which could be a good investment,” Bass said after the meeting. “Or, it could be throwing money away depending on the market.”
Close told residents that most conversions inflate property values because buyers will usually pay a premium to obtain both the land and the mobile home on top of it. He warned, however, that residents should be on the lookout for “unscrupulous” Realtors looking to make a quick buck. Such investors often try to scare residents into selling homes for low-ball values, robbing homeowners of equity and undercutting property values in the neighborhood.
“You have to take care of your own,” Close said, urging people to protect the elderly residents of the community from such predatory investors.
The park, which has operated at the site for at least two decades, exclusively served elderly residents until the early ’90s, when changes in state law allowed younger families to start trickling in, according to City Planning Manager Bill Faus.
“We are going to be monitoring this situation very closely because of it’s size and the large number of elderly citizens on fixed incomes that occupy this park,” he said. “We are concerned about the potential economic impact on those individuals.”
Faus said the city has little power to prevent or influence the conversion of mobile home parks into condominiums, a process governed closely by state law. While council members can use their discretion to reject or modify most development proposals, they can only block a mobile park conversion when it conflicts with the city’s general plan, zoning laws or other regulations.
Pacific Mobile Estates, the biggest of four mobile home parks in Gilroy, lies just east of Gilroy High School on the south side of the 10th Street corridor. The owner, Jurow, was on vacation Wednesday and could not be reached for comment.
In the next two months, residents will receive notification in the mail about their ability to either purchase or continue renting the land beneath their homes as part of the conversion. Within the next five or six months, residents can also expect to receive an appraisal of their land (not including the value of the home). For those who choose to purchase their homes, the appraisal price will be “locked in” for 90 days after the conversion is complete, whereas those who continue renting and decide to buy after the 90-day window will face the vagaries of the market, according to Close.
The entire conversion process is expected to last 10 months to two years. During that time, the park owner is asking residents to serve on a “conversion committee” charged with forming a Homeowners Association. The HOA will ultimately govern the park and finance landscape maintenance, insurance and other community costs. Residents who purchase their homes will have to finance the HOA through a monthly fee.
Marissa Lopez already pays a combined $1,000 a month for the mortgage on her home, the rent on the land and utilities. She worried that promises about increased home values would not materialize, backing up the fear by pointing to a neighbor whose home has been on the market for months.
Even if property values increase, Lopez, a single mother with two children, doubted she could cobble together enough loans to purchase her land.
“I am so low income that $59,400 is a dream. I am so low-income your head would be spinning,” she said to Close in front of scores of neighbors. “How am I supposed to sell my piece of tin?”
To learn more about the conversion process, contact City Planner Regina Brisco at 846-0242 or Susy Forbath, a paralegal for the property owner, at 310-393-4000.
